Our “ESOP Podcast Summer School” series continues. We’ve selected highlights from our archives featuring employee-owners that we’ll re-release all summer. (Because these episodes are from the archives, please remember that the links and email addresses mentioned in the podcast may no longer be valid.) As you enjoy summer school, we are working hard behind-the-scenes to bring you new content and services that are better than ever, starting in the fall of ‘19!
Restek Pure Chromatography is based in Bellefonte, Pennsylvania and is proud to be a company of owners. Mike Shuey is Restek’s International Customer Service Supervisor. He received the 2016 ESOP Outstanding Chapter Officer Award.
"[At Restek] we work toward making our Core Values and Expectations of Owners guidelines by which we live our personal lives as well as our business lives. "In The Light" means literally every business decision made at Restek, excepting only salary information, is open to review by any Restek employee.
Because Restek is 100% employee owned, living these values and expectations is mutually beneficial to our customers, our company, and every employee.
We are a family of employees committed to an inclusive, collaborative, and safe workplace that treats everyone with dignity and respect. Together, we are dedicated to the success of our customers and business partners, and to supporting the local communities in which we operate." [Source: Restek Philosophy ]
You can hear the original September 29th, 2017 release of this episode in full in "Episode 3" of The ESOP Podcast.
Episode 3 Transcript
Announcer: 00:12 Welcome to The ESOP Podcast brought to you by Capital Trustees, keeping you up-to-date on all things ESOP.
Bret Keisling: 00:23 Hi, this is Bret Keisling, and our guest today on The ESOP Podcast is Mike Shuey of Restek Corporation. Hi, Mike, how are you?
Mike Shuey: 00:32 Good, Bret. How are you doing?
Bret Keisling: 00:33 Good. Thanks for joining us today. Mike, you're an officer of the Pennsylvania Delaware chapter of the ESOP Association?
Mike Shuey: 00:38 Yes. I'm the VP of legislation for the Pennsylvania/Delaware chapter. I do most of the Pennsylvania advocacy recently. We just brought in some Delaware company, a new ESOP in Delaware to do the Delaware advocacy now.
Bret Keisling: 00:50 And the advocacy is directed towards elected officials.
Mike Shuey: 00:55 Yep. Both federal and state. Most of the stuff that I do is on the federal level, visiting Capitol Hill. Bringing our congressmen and, hopefully, senators on our campus to talk about any pro-ESOP legislation going on.
Mike Shuey: 01:22 Yep. We're in Bellefonte; global headquarters is in Bellefonte, PA, right outside of Penn State University. We have about 350 employees at our global headquarters and some stragglers here and there working from home, and we have a satellite office in California.
Bret Keisling: 01:39 And broadly speaking, what kind of work does Restek do?
Mike Shuey: 01:42 Well, that's a good question. We are chromatography business basically it's a separation science between liquids and gases. It's hard to explain. I'm still learning it and when I started and didn't know what was going on either. So.
Bret Keisling: 01:57 And what's your position with Restek? What do you do?
Mike Shuey: 02:00 I'm the International Customer Service Supervisor, so I'm part of the global reach. My team and I, we do most of our work via email, but we try and work throughout the day as much as possible. Come in early, stay late.
Bret Keisling: 02:17 And Mike, you started doing some issue advocacy on behalf of Restek before you got involved in The ESOP Association?
Mike Shuey: 02:25 Yeah. Before the chapter work, I went to an ESOP conference and started going to Capitol Hill with coworkers and it was kind of just like a, just a visit. And I really got interested in the whole advocacy venue and I've been doing it ever since, probably eight or nine years now. And I love it. Even if I wasn't in a chapter officer, I'd be involved, at least with Restek.
Bret Keisling: 02:51 And out of curiosity, the advocacy that you started for Restek, was that ESOP related or was it just related to the needs of your specific company?
Mike Shuey: 02:59 Me in particular? It was ESOP related. We do have other folks, like in our export compliance, they'll go to Capitol Hill to do more of Restek stuff that goes on in the federal areas with trade compliance and stuff. But I particularly in was just involved with the ESOP.
Bret Keisling: 03:19 And at some point you started doing the same advocacy but doing it on behalf of The ESOP Association or on behalf of the chapters. Is that correct?
Mike Shuey: 03:28 Yup, Yup. After a few years, the actual legislative officer, he was moving on, so he asked me if he, if I could take over for him. I thought it was an honor and I've definitely tried to expand on it as much as possible, be as organized with the whole program as I can. I'm always taking new ideas. It's great to meet new people, meet folks on Capitol Hill, and just basically have as many different ESOP companies on Capitol Hill from the state telling their story and it just -- the Congressmen and the senators love it.
Bret Keisling: 04:03 So unlike certain issue advocacy or industry advocacy where boy, let's say if it's the healthcare industry, not to pick on them or speak positively with healthcare industry, there are all kinds of similar companies that are lobbying government for the same kind of, you know, they're all looking for the same thing. But in the ESOPs, every company is different. Some manufacturers, some sell, some professional services, size of companies are all different, but you're coming together as one. Are there shared objectives as ESOPs that you have?
Mike Shuey: 04:36 Yeah. Between all of us that go on Capitol Hill, it's basically one story is ESOP is a great avenue for businesses. There needs to be more of them in the country. Once we tell our story, a lot of times they're blown away and each company that are there like we're about, 350 employees, there's companies with 100 people, there's manufacturing companies, there's all sorts of different trades that can be represented.
Bret Keisling: 05:06 And why is the advocacy important to the ESOP community?
Mike Shuey: 05:11 Main reason is to keep the tax benefits that the ESOP model gives to these companies. If we don't do that basically coming up that's been talked about recently as tax reform. We need to stay in front of our senators and congressmen that way. One's tax reform does come out, there's no hidden rules or anything that could negatively benefit any ESOP.
Bret Keisling: 05:39 And the tax benefits for those that may not be familiar. The number one is that if you're 100 percent S Corporation, you don't pay federal income tax. Is that correct?
Mike Shuey: 05:48 Yes.
Bret Keisling: 05:48 Are there any other like significant tax aspects that you're lobbying on in addition to that? Or is that really the primary focus?
Mike Shuey: 05:58 Primarily federally. We also have some work going on in the state level. There's, we're an S corporation, Restek is, so, but some of the C Corporations don't have as many good benefits as some of the other states. So we're trying to work on opening that up for C Corporations in Pennsylvania as well through the state.
Bret Keisling: 06:19 Mike, in the political environment today and we try not to get involved in politics and in terms of pushing one side of the issue or one, you know, another side of the issue. But in terms of politics, they tax reform as you had mentioned as a focus for both political parties in Congress. And the general refrain is everybody needs to pay their fair share, and politically there's just a disagreement on what the fair share is. Should wealthier pay less or more sort of, you know, lower income people, what should do so. So what is meant by fair share. In the ESOP's, if you're a 100 percent S Corporation, as you said, there's no federal tax whatsoever and that doesn't seem like ESOPs are paying their fair share. So why is it a good idea, not just for the ESOPs but for Americans, why is it a good idea to have the tax break for ESOPs for the rest of the country?
Mike Shuey: 07:07 Well, so being an ESOP basically gives employee ownership to all the employees, so they have a bigger stake in the game and what they'll do is they'll produce more. The business will grow. So even if we're not paying the federal tax upfront, we're growing the state level and we're contributing more to wages purchasing from local companies, the whole gamut.
Bret Keisling: 07:34 And is it true that in recessions that ESOP companies tend to weather the recession a little bit stronger than non-ESOP companies?
Mike Shuey: 07:42 Yeah, percentages are higher. I'll give you a good example. At Restek, we went through the recession and we started to see a decline in sales and profit. So what we did was we came together as a company, we met, tried to figure out a strategic way of saving. So what we did was we, we cut out all the fringe benefits, travel, everything. So the main focus was the employee. We didn't lay anybody off and we actually were ahead and sales and the very next year our share price went up as a result of that.
Bret Keisling: 08:14 So during a recession you didn't lay off any staff, you tightened the belt, so to speak, which all companies have to do. And in a recession where many companies had vast layoffs or even closed your share price increased.
Mike Shuey: 08:27 Yeah, I think the national average was like around 12 to 13 percent, and in ESOP companies was, I think five to six percent layoff rate. And the good thing was Restek didn't have to lay anybody off during that recession.
Bret Keisling: 08:40 Mike, let's talk about the advocacy itself. A lot of folks in the ESOP community know your efforts, and from states all around. By the way, you are with the Pennsylvania Chapter, but every state or every chapter has an advocacy, is that correct?
Mike Shuey: 08:52 Correct.
Bret Keisling: 08:53 So, we certainly know at the ESOP Association National Conference in Washington DC, which generally is May, everybody comes for the concert -- or I'm sorry -- conference, let's say on a Thursday or Friday, but you're assembling your team and all the chapters, like on a Wednesday and you're visiting Capitol Hill, is that correct?
Mike Shuey: 09:09 Yeah, basically we put the troops together the day before, put together an agenda of what we want to talk about with everybody, schedule throughout the day. We're up at Capitol Hill all day long. In my opinion, the more people and more ESOP companies, the merrier. Even professionals. That's a good, good way of showing the, the, the employee side of it, but also how it benefits the professional side of it is as well. So there some meetings, we have five or six people, other people we have 10 and if it takes 20, 30 minutes for a session, I think it's even better because the more stories you tell of how all the good stuff that you guys were doing, it benefits the congressman and/or senator.
Bret Keisling: 09:54 So we see, Mike, in the news a lot that issue advocacy in a lot of respects, this is, I'll say a cranky time in American history and that sort of thing. So when you're on Capitol Hill, is there yelling and shoving and drama, or are they, are the representatives and senators happy to hear from you and your colleagues?
Mike Shuey: 10:12 No, typically, because we say it upfront where we want to talk about pro-ESOP legislation and we're from an ESOP. Luckily the ESOP model is a bipartisan aspect in Capitol Hill. So they want to talk to us. And it's great because as soon as we get up there, then they're all smiles with us. What they do with others folks in advocacy groups, [laughter]it's up to them.
Bret Keisling: 10:38 It's they're issue and you're not... But my whole point is for somebody who might look at what you're doing and say, boy, it's a mess up in Capitol Hill. We don't want to participate. Your message is actually, no, it's very friendly. Very professional. People may not agree with you, but that doesn't mean that there's anger or drama or that sort of thing.
Mike Shuey: 10:55 No, typically when you go to Capitol Hill it's nothing like you see on TV, like at CNN or Fox or whatever. But it typically everybody is friendly. They want to see you, they want to talk to you, they want to hear you. The avenue of, you know, passing bills and getting bills pushed through that, my opinion, is you have to be there face to face with them and talking to them.
Bret Keisling: 11:23 And in terms of the issues that are advocating for besides ESOP's broadly and obviously like to see them protect the tax advantages for an S Corp, are there any specific issues that you're lobbying or advocating on or is it just general support of ESOPs?
Mike Shuey: 11:41 Basically there's two bills out there right now, HR2092, which is the House version, and then S1589, that's the Senate version. What we want to try and do is get as many cosponsors to each of these bills as possible. Each bill in the House and the Senate. They have like the original cosponsors. But if you grow that and say 50 percent of the House and 35, 40 percent of the Senate has cosponsored a bill like this, that tells the Capitol Hill that this is very important.
Bret Keisling: 12:15 And Mike, let's talk about the politics a little bit in the context of different sides coming together. Senator Toomey from Pennsylvania generally, does he support ESOPs?
Mike Shuey: 12:29 Yes. Yeah, he's had, he supported ESOPs the last six or seven years.
Bret Keisling: 12:33 And Senator Toomey is recognized - and you and I are both reside in Pennsylvania - he's recognized as a rather conservative Senator, is that correct?
Mike Shuey: 12:40 Mmm hmm.
Bret Keisling: 12:40 And two years ago, maybe three years ago, one of the speakers at The ESOP Foundation in Washington DC was Senator Bernie Sanders who is not recognized as one of the most conservative senators. Is there a lot, do you notice, among the advocacy is they're coming together of conservatives, liberals, and even in Senator Sanders case, socialist, for the good of the ESOPs, or is it a conservative side or a liberal side who's supporting these ESOPs?
Mike Shuey: 13:05 No, it's basically every party. It's bipartisan. Once they hear the ESOP story and how it empowers the employees and the impact that that company has in their area, especially the senator or congressman in that area, they will support it until, throughout their term. So it's basically a, it's bipartisan across the board. It doesn't matter if you're conservative, liberal, it's a good model and luckily it started to get more well known at Capitol Hill and hopefully we get more and more support, especially in tax reform season.
Bret Keisling: 13:43 Excellent. I'm going to ask you a final question, Mike, and that's with the national audience. There are both ESOP companies, professional advisors, and the participants, the employees of the companies themselves. As you're looking at each of those distinct groups, what would you ask from your position in the chapter? How could they best help you with the advocacy, which in turn helps themselves? What would you like the average person who's not really involved, who might hear of the advocacy in this podcast? What do you want them to do?
Mike Shuey: 14:14 Well, there's a few things. One of the most important things is to have, invite them, whether it be the Senator or House of Representatives, invite them to your company. That's the most powerful thing. Show the employees in action, how your company impacts the local economy. Number two is reach out to them, call them, send them an email. There's an advocacy website on our chapter that has all sorts of different templates, instructions on how to participate in advocacy. The national web, ESOP Association website has assistance on reaching out to the House of Representatives and the Senate. And also visit Capitol Hill, come reach out with me and whenever we go up in next May, the more the merrier. Those are basically three avenues, communication, invite them to your company and go to Capitol Hill.
Bret Keisling: 15:08 Mike, I'd like to thank you for spending time with us today on The ESOP Podcast. We follow the Restek Corporation. You work for a very special company, and as far as ESOP's go with 350 employees, you really are an example of how a company should be run as an ESOP. You guys do a great job and all of us in the ESOP community appreciate your advocacy efforts and the work that you do to ensure the ESOPs be very healthy. So thank you for joining us today and thank you for all the work that you do.
Mike Shuey: 15:35 Thank you very much, Bret. And we're the Pennsylvania/Delaware company of the year this year!
Bret Keisling: 15:39 Congratulations to Restek! So with that folks. This is Bret Kiesling at Capital Trustees. Thank you for joining us for The ESOP Podcast and I hope you'll join us again next week. Have a great day.
Announcer: 15:52 Thank you for listening to The ESOP Podcast brought to you by Capital Trustees and their managing directors, Bret Keisling and Rich Heeter. Production assistance provided by Brian Keisling and Third Circle Inc. Logo designed by BitsyPlus Design and music created by Max Kiesling. Join us again next time for The ESOP Podcast.